Appeal from the Circuit Court of Cook county; the Hon. FRANK
H. BICEK, Judge, presiding. Affirmed.
PRESIDING JUSTICE BRYANT DELIVERED THE OPINION OF THE COURT.
This is an appeal by intervenor-appellant United States of America, hereinafter referred to as U.S., from a judgment of the trial court against the garnishee defendants and the dismissal of the complaint in intervention. Judgment was entered against the garnishee defendants, Harris and Selwyn Theatres, Inc. and Herbert R. Ries, in the amount of $8,700.
A chronological statement of the events leading to this result is as follows:
On May 9, 1957, plaintiffs-appellees filed an attachment suit against Artists Embassy, Inc. and Jackie Productions, Inc., residents of California. The same day, an attachment writ was served upon the garnishee defendants, Harris and Selwyn Theatres, Inc. and Herbert R. Ries.
On September 23, 1957, the District Director of Internal Revenue in Los Angeles, California, signed an assessment list showing a tax deficiency against Jackie Productions, Inc., one of the principal defendants.
On November 5, 1957, a judgment against the principal defendants, Artists Embassy, Inc. and Jackie Productions, Inc., was entered in the Circuit Court of Cook County in the amount of $8,700.
On January 3, 1958, the federal tax lien covering the deficiency of Jackie Productions, Inc. was filed in the Recorder's Office of Cook County.
Garnishee defendants answered the attachment writ by indicating that they held no funds due the principal defendants. After the judgment was rendered against the principal defendants, a trial was had on the question of what funds were being held by the garnishee defendants. The U.S. had filed its lien against Jackie Productions, Inc. in the Recorder's Office and was allowed to intervene in the proceedings.
The trial resulted in a judgment against the garnishee defendants and a dismissal of the complaint in intervention by the U.S. The court found that the garnishee defendants had funds belonging to the principal defendants, that the plaintiffs-appellees acquired a lien upon such funds when the attachment writ was served and that the lien was perfected when the judgment was entered against the principal defendants on November 5, 1957. As a result, the lien of the plaintiffs-appellees was held to be paramount and superior to the interest, rights and lien of the U.S. as intervenor.
The U.S. here appeals from this judgment and maintains that plaintiffs-appellees had only a contingent claim on the fund held by the garnishee defendants until the judgment of March 13, 1959, against the garnishee defendants and such claim could not be considered a lien even then until delivery of a writ of execution on that judgment. It is contended that the lien of the U.S. was protected from the time that the tax assessment was made in California against Jackie Productions, Inc.
Section 6321 of the Internal Revenue Code of the United States (1954), provides in substance that a lien shall arise in favor of the United States upon the property of any person liable for taxes who has refused or neglected to pay such tax after demand. This is the section which the U.S. contends is applicable to the present situation.
Section 6322 provides that the lien created by section 6321 arises when the assessment is made and continues until the liability is satisfied or becomes unenforceable by lapse of time.
Section 6323 provides that the lien imposed by section 6321 is not superior to that of a judgment creditor until notice thereof has been filed in the office designated for the filing of such notices by the state in which the property is located. Appellees claim to be within the provisions of this section in that they became a judgment creditor when the judgment ...